LONDON: European shares rose on Monday, boosted by a surge in ARM to a record high after Japan's SoftBank agreed to buy the chip designer at a premium of more than 40 percent to Friday's closing price.

ARM was up 43 percent to 1,700p after SoftBank agreed to buy the British company in a 24.3 billion pound ($32.2 billion) deal.

The deal will see SoftBank pay 1,700p for every ARM share, and the Japanese firm said it would double ARM's UK staff and keep its headquarters in Cambridge.

ARM added 28 points to the FTSE 100, which was up 0.6 percent, and contributed almost three-quarters of the index's rise.

Sterling's fall to its lowest in more than three years against the yen made ARM more attractive to SoftBank, and shares in ARM, which derives most of its earnings in dollars, have risen nearly 17 percent since Britain voted last month to leave the EU.

"An increase in inbound M&A was one of the obvious consequences of Brexit and weakened sterling but few expected it to manifest itself so quickly or at so large a scale," Dan Ridsdale, analyst at Edison Investment Research, said in a note.